This study empirically investigates the impact of supply chain network centrality on corporate greenwashing behavior. By constructing supply chain networks of Chinese A-share listed companies, we find a strong positive correlation between supply chain network centrality and corporate greenwashing behavior, with an increase of approximately 6.20%. The paper identifies the underlying mechanism as the contagion of the green bandwagon effect within the supply chain, which is observed specifically in the downstream network, particularly among corporate-customers. Additionally, we observe that the positive effects are more pronounced in companies with lower information asymmetry, as well as in labor- and capital-intensive industries and regions with disadvantaged economic conditions. These findings offer important insights for improving corporate environmental responsibility and curbing greenwashing practices.

This article examines the impact of the Green Financial Regulatory Policy on corporate strategic ESG behavior against the backdrop of the 2017 policy integration of “green finance” into the Macro-Prudential Assessment by the central bank. The research identifies that GFRP may shift corporate focus towards the disclosure of ESG performance while neglecting the actual practices of ESG engagement, potentially inducing firms to engage in ESG greenwashing. It is further posited that corporate green perception and executives’ environmental backgrounds serve as primary mechanisms in this dynamic. Additionally, the policy efficacy of GFRP on strategic ESG behavior exhibits heterogeneity

It remains unclear whether state shareholding (SS) truly enhances firms’ fulfillment of their corporate social responsibility (CSR) or merely motivates them to strategically release “enhanced” CSR reports. Utilizing the reform that permits state–owned equity to participate in privately–owned enterprises (POEs) in China, we find that the participation of SS enhances POEs’ access to resources and alleviates their needs for legitimacy, leading to disparities in CSR disclosure and substantive CSR activities for POEs, consistent with the notion of greenwashing. The greenwashing behavior is particularly pronounced in the presence of large state-owned shareholder and when CSR disclosure is compulsory.

This study examines the effect of retail investor-firm communications (RIFC) on corporate ESG performance. Exploiting the unique setting of Chinese investor interactive platforms which enable retail investors to pose questions and require firm answers, we show that RIFC significantly improves corporate ESG performance. The consistent evidence is obtained by employing the difference-indifference estimation, Oster’s test and alternative indictors, strengthening our confidence in the causal link between RIFC and corporate ESG performance. Furthermore, we identify two potential economic channels underlying our results: strengthening monitoring pressure and alleviating financial constraints. Our finding further reveals that RIFC drives genuine improvements in ESG performance rather than greenwashing practices. Collectively, this study advances our understanding of the interplay between retail investors and corporate ESG performance, providing a stepping stone toward effective solutions to corporate sustainable development.

In recent years, the phenomenon of ‘greenwashing’ of corporate environmental, social and governance (ESG) reports has been on the rise, seriously interfering with normal capital investment behaviour. This paper explores the relationship between investor concerns and the ‘greenwashing’ of corporate ESG reports, using Chinese A-share listed companies from 2014 to 2021 as a sample. The results show that green finance policies significantly contribute to the ‘greenwashing’ of ESG reports of heavily polluting companies. Under the pressure of green finance policies, heavily polluting companies have more incentives to ‘greenwash’ their ESG reports to relieve financing pressure. This paper’s findings suggest that green finance policies that promote enterprises’ green transformation may negatively induce enterprises to make false ESG disclosures.

As “sin” stocks and “brown” stocks generally earn higher returns than “green” stocks, fund managers face a trade-off between profitability and sustainability preferences when investing in environmental, social and governance (ESG). We explore the investment styles of ESG funds in the Chinese A-share market and analyze the behavior of ESG funds in terms of asset allocation and portfolio adjustment. We find that ESG funds prefer stocks with high return performance over stocks with high ESG performance. Textual analyses of prospectuses reveal a degree of “greenwashing” behavior by ESG funds. Overall, we show that ESG funds not purely ESG-driven.